The Kentucky State Senate today approved House House Bill 168, the divisive “beer bill.” It clarifies that a brewery cannot also operate a wholesale business.
After a month of hearings and lobbying from various industry groups, HB 168 passed with a vote of 23-13 and will now head to Gov. Steve Beshear’s desk to be signed into law. The bill would force Anheuser-Busch to close down or sell two distributorships it owns in the state.
The bill had garnered support from a number of industry stakeholders, including craft brewers, independent wholesalers, and even MillerCoors. The Kentucky Guild of Brewers posted a celebratory message to Facebook, thanking proponents who called state legislators advocating for the bill.
The effort was derided by A-B, however, as an “assault on 200 jobs by greedy special interests.” In a statement issued to Brewbound, Damon Williams, director of sales and marketing at Anheuser-Busch of Louisville, condemned the bill’s passage.
“This has been an appalling exercise and nothing short of a full-scale attack on a good corporate citizen who has followed every rule and invested heavily in the Commonwealth of Kentucky for decades,” he said. “This legislation violates our rights under the U.S. and Kentucky constitutions, discriminates against our company by providing economic protections for in-state special interests and represents nothing short of a taking of our property.”
In addition to the Louisville operation, A-B also owns a distributorship in Owensboro. As a result of the bill’s passage, A-B will be required to sell of or close down the two operations. A timeline for when the bill is expected to take effect is unclear.
There had been earlier talk of possibly including an exemption in that bill that would grandfather in existing outfits owned by breweries, but as passed, no such carve-out was included.
There is also at least one other, much smaller wholesale operation in the state that will be affected by the bill’s passage. As Brewbound reported yesterday, Riverghost Distributing, which was founded by Rhinegeist Brewery of Cincinnati, also now has an uncertain future.
Bob Bonder, co-founder of Rhinegeist and Riverghost, said he’s furious with how little his company’s interests were considered throughout the process.
“We’re just sort of shocked and appalled by this whole thing and upset the government wouldn’t hear us out,” he told Brewbound. “We weren’t expecting to be ignored so wholeheartedly.”
As Bonder understands it, the business won’t be forced to shut down or sell in the immediate future, but rather the state won’t allow the company to renew its wholesale license in December. Riverghost was founded, the company wrote in a recent op-ed on Kentucky.com, in compliance with state rules and with the assurances of the state’s department of commerce that what they wanted to do was legal.
Unlike the A-B wholesalers, which exclusively sell A-B products, Riverghost sells Rhinegeist beers as well as products from Winecraft, an Ohio wholesaler and importer of international wines.
The fight may not be over yet, as A-B is reportedly considering filing a lawsuit with the state to protect its wholesale interests.
“We have been doing everything possible to protect our employees and our Kentucky business,” added Williams. “This was always an unnecessary solution in search of a problem that didn’t exist, and we will continue to fight for the business we’ve successfully built with our employees over the last 40 years.